Toss-ups: Pennsylvania Cash Attack

VoteVets.org, Club for Growth TV ads go a bit too far in this Senate race.

Summary

Two independent groups are spending heavily in the Pennsylvania Senate race, and we find both are airing TV ads that go a bit too far:

VoteVets.org Action Fund, a left-leaning veterans group, is up with an ad that claims Republican Pat Toomey supports letting Wall Street executives keep "every penny of their bonuses." It’s true that he opposed a bill that would have imposed a 90 percent tax on bonuses for executives at bailed-out banks. But that’s not the same as letting executives keep "every penny," since normal tax rates still apply.

Club for Growth Action, a right-leaning, pro-business group, claims Democrat Joe Sestak voted for the stimulus bill "despite the recession." In fact, he and others voted for it becauseof the recession — and it has created some jobs.

The club’s ad also claims Sestak "backed spending" for such efforts as "puppet shows" and the study of ant hills. It’s true that stimulus money ended up funding such projects, but they were not specified in the legislation. Sestak had no control over how federal agencies chose to allocate their stimulus funds.

Analysis

Pat Toomey and Joe Sestak are running for a seat now held by Sen. Arlen Specter. The opening was created when Specter, a longtime Republican, switched to the Democratic Party to avoid losing to Toomey in the GOP primary, only to lose in the Democratic primary to Sestak.

The race, which is rated as a "toss up" by the Cook Political Report, has attracted a lot of interest from outside groups. The Federal Election Commission says that as of Oct. 19 outside groups have spent $10.2 million in the Toomey-Sestak race. That includes $462,000 by VoteVets.org Action Fund and $1.1 million by Club For Growth Action, FEC data show.

Toomey and his allies, such as the Club for Growth (of which he is a former president), have portrayed Sestak as a big-spending liberal marching lockstep with President Barack Obama. Sestak is a 31-year Navy veteran and former rear admiral. He and his supporters, such as VoteVets.org, have sought to depict Toomey as a Wall Street dealer who is out to protect business interests. These are the lines of attack that we see in the latest ads.

Putting Wall Street Execs Ahead of Combat Vets?

The VoteVets ad — released Oct. 12 — features three war veterans against the background of an American flag. The soldiers say Toomey "voted against the $1,500 combat bonus," but supported letting Wall Street executives "keep every penny of their bonuses." Further, it claims that Toomey called the combat bonus for Iraq and Afghanistan war veterans "wasteful spending."

It’s true that Toomey, then a U.S. representative, voted in 2003 against an amendment that would have provided $265 million for the combat bonus. But he never voiced support for Wall Street executives keeping 100 percent of their bonuses.

[TET ]

VoteVets.org Action Fund TV Ad: "Trained"

Three soldiers: As a soldier in Afghanistan, I was trained to expect the worst. At home, I thought it would be different. But Congressman Toomey voted against the $1,500 combat bonus. And Congressman Toomey supports letting Wall Street execs keep every penny of their bonuses. Toomey said that money for troops was wasteful spending. Bonuses for Wall Street are fine? But bonuses for troops are wasteful? I expected the worst in Afghanistan. I expected better from Congressman Toomey.[/TET]

The Toomey campaign cannot dispute this claim. It can only offer an explanation. In a press release, the campaign said that in order to pay for the bonuses, the amendment would have cut funding for Iraq’s reconstruction, "which was necessary to help our men and women succeed" in Iraq. An Oct. 17, 2003, Congressional Quarterlyarticle stated that the amendment "would have shifted the money from the $900 million in the bill slated for importing petroleum products in Iraq."

The ad also claims that Toomey called such a bonus for troops "wasteful spending." The quote is from a June 29 article on PA2010.com in which Toomey defended his vote against the combat bonus:

Toomey: Now there are times when some of these measures are [used] as an excuse to undermine the fiscal stability of our country. That’s very bad policy. And, we shouldn’t hold military and veteran needs hostage to wasteful spending.

It is unclear what he meant by "wasteful spending." A spokesman from the Toomey campaign said the phrase referred to "massive spending bills, containing hundreds of pork projects." He said Toomey was arguing that veterans’ needs should be voted on separately and not "held hostage to wasteful spending." On the other hand, Richard Smith wrote on the VoteVets.org blog, VetVoice, that Toomey’s "wasteful spending" remark referred to the combat bonus itself.

We’re not in the business of reading Toomey’s mind, so we present both interpretations here and leave it to readers to decide which side presents the more plausible explanation.

Letting Wall Street Execs ‘Keep Every Penny’?

The ad misleads viewers with the claim that "Congressman Toomey supports letting Wall Street execs keep every penny of their bonuses." That claim would mean that Toomey supported imposing no taxes on Wall Street bonuses. That’s not the case.

Here’s what happened: Toomey did publicly oppose an amendment that would have imposed a 90 percent tax on bonuses for executives at banks that received more than $5 billion in federal bailout funds under the Troubled Asset Relief Program, or TARP. The amendment was sparked by the disclosure in March 2009 that American International Group (AIG) had agreed to pay $165 million in bonuses, despite having received $170 billion in federal aid to keep the company afloat. The amendment passed the House 328-93 on March 19, 2009.

A spokesman for VoteVets referred us to an e-mail that Toomey wrote March 20, 2009, opposing the amendment, when he was president of the Club for Growth. In the e-mail, which his campaign confirmed as authentic, Toomey praised Republican Rep. John Campbell of California, who voted against the amendment, and called its passage unfortunate:

Toomey: Congress was entirely consumed this week with trying to punish the AIG executives who received $165 million in bonuses despite running the company into the ground. House Democrats decided a 90% tax (!!) would do the trick. … In the end, it was a bad bill that should have been defeated. Unfortunately, it passed 328-93. All but six Democrats voted for it, while the Republicans were evenly split 85-87.

The huge tax never happened. It received a "frosty reception from the Obama administration and was shelved by the Senate," as Fortune magazine wrote. Even though it failed, Wall Street executives had to pay taxes at the existing rates, so they didn’t get to "keep every penny."

In his e-mail, Toomey quotes Campbell saying, "I understand the public outrage over these bonuses and I share much of it. But this is not the way to fix it. Sue them to get the money back. But don’t do this." So it is clear that Toomey was against the 90 percent tax, but not for letting Wall Street executives off the hook.

Laughably Liberal?

Club for Growth Action’s ad, which first aired Oct. 6, focuses on Sestak’s support for Obama’s stimulus bill as proof that he is "laughably liberal." In it, an announcer cites Sestak’s vote for the stimulus bill "despite the recession." But Rep. Sestak backed the stimulus bill becauseof the recession, and most economists agreed that some kind of drastic measure was necessary to lessen the impact of the recession. In fact, as we’ve said before, the nonpartisan Congressional Budget Office has estimated that the stimulus increased employment by between 1.4 million and 3.3 million people, compared with what would have happened without the stimulus.

[TET ]

Club for Growth Action TV Ad: "Laughably Liberal"

Announcer: How liberal is Congressman Joe Sestak? Despite the recession, Sestak voted for that seven hundred billion dollar Obama-Pelosi stimulus. Sestak backed spending a half million dollars to study ant hills. Two hundred ten thousand tax dollars to examine how honey bees learn. Even a hundred thousand for socially-conscious puppet shows. Joe Sestak: laughably liberal. Club for Growth Action is responsible for the content of this advertising. [/TET]

Stimulus Earmarks

The ad attacks Sestak for specific programs funded by the stimulus "to study ant hills" and "to examine how honey bees learn." Sestak did vote for the stimulus bill, and stimulus funds did go to pay for the programs cited in the ad. But Sestak did not "back spending" specifically for those programs.

The ad cites a Dec. 18, 2009, article in The Hill about a partisan report on stimulus spending issued by Republican Sens. John McCain of Arizona and Tom Coburn of Oklahoma. The report claimed $7 billion in stimulus funds had been "wasted or mismanaged."

It is true, as the report claimed, that $500,000 was awarded to Arizona State University and $450,000 went to the University of Arizona to study the genetic makeup of ants and the division of labor in ant colonies.

It is not true that $100,000 went for "socially-conscious puppet shows," as the ad says. Some money did go to groups that perform puppet shows, but it is not clear how much actually went to "socially-conscious puppet shows."

The McCain-Coburn report said $100,000 went to three theater and recreation groups (in Minnesota, Pennsylvania and Washington state) and part of that money went to puppet shows. Recovery.gov, the federal website that provides information on stimulus projects, confirmed that In the Heart of the Beast Puppet and Mask Theater of Minneapolis received $25,000, and Spiral Q Puppet Theater in Philadelphia received $25,000. The money was given to help offset the decline in philanthropic support, according to Recovery.gov. In addition, Washington State Parks and Recreation Commission got $50,000, and the McCain-Coburn report contains a press release that shows the commission spent some of that money to offer a free puppet show.

But Sestak didn’t "back spending" for any of these specific projects. Congress did not earmark funding for specific projects in this bill. The funds were awarded to 28 federal agencies and "each agency develops specific plans for how it will spend its Recovery Act funds," according to Recovery.gov. Although he voted for the stimulus package, it was the administration that approved the specific grants.